COLLECTED WISDOM™ on ERISA §404(c)
ERISA §404(c) provides a plan sponsor and other fiduciaries with liability protections on participant-directed retirement plans, like a 401k, if the plan satisfies the conditions in the 404(c) regulations.
Other topical areas you may find of interest that are not fully covered here include
Investment Committees and
Fiduciary Responsibility and Liability Issues.
PowerPoint on 404(c) Compliance - Summary: This presentation reviews the following points: Overview of 404(c) fiduciary relief; Basic requirements to obtain relief; Mapping relief; Default Investment Options/"QDIA" safe harbors; Participant fee disclosure regulations; Scope of relief; and, Case law developments and implications.
Source: Morgan, Lewis & Bockius LLP 
, October 2011.
ERISA Section 404(c) Checklist - Summary: This ERISA section 404(c) checklist provides a handy tool for you to compare your plan against best practices. Completing the checklist may highlight areas where additional steps are needed to improve ERISA section 404(c) compliance.
Source: Putnam Retirement Services , June 2011.
Participant Fee Disclosure Regulations – ERISA §404(c) Changes - Summary: This is an article regarding the October 2010 participant fee disclosure regulations. The new regulations make both substantive and cosmetic changes to the 404(c) landscape. Article provides a brief background regarding 404(c) and will discuss the changes the regulations have made.
Source: Sungard/Relius, February 2011.
Fund Facts Sheets Fail Under 404(c) - Summary: While the full prospectus must still be available on request, having to automatically provide only the summary may help simplify 404(c) compliance. However, plan sponsors should be careful. What you think is a summary prospectus may not be one at all.
Source: Drinker Biddle & Reath LLP, August 2010.
DOL Approves Use of Summary Prospectus to Satisfy ERISA 404(c) - Summary: In September 2009, the DOL issued Field Assistance Bulletin 2009-03, permitting the use of summary prospectuses to satisfy the prospectus requirement of ERISA Section 404(c).
Source: Prudential , December 2009.
ERISA Section 404(c) and Summary Prospectus - Summary: DOL Field Assistance Bulletin 2009-3 describes the circumstances in which a participant-directed individual account plan may satisfy the prospectus delivery requirements of Section 404(c) by providing a Summary Prospectus.
Source: McKay Hochman, December 2009.
29 CFR 2550.404c-1 - ERISA Section 404(c) Plans - Summary: This is the code section that describes the kinds of plans that are ERISA section 404(c) plans, the circumstances in which a participant or beneficiary is considered to have exercised independent control over the assets in his account as contemplated by section 404(c), and the consequences of a participant's or beneficiary's exercise of control.
Source: Department of Labor, November 2009.
The New Take on 404(c): Confusion in the Federal Courts - Summary: ERISA Section 404(c) provides fiduciaries with a defense against losses incurred by participants who exercise control over their accounts. But the protection applies only to the investment decisions made by the participants and not to the selection and monitoring of the investment options offered to the participants...right? Maybe. For the present, we have an anomaly; the answer depends on where you live.
Source: Drinker Biddle & Reath LLP, May 2009.
Plan Sponsors' Guide to ERISA 404(c) - Summary: Section 404(c) of ERISA provides protection for plan sponsors of participant directed plans. This paper describes the requirements of complying with ERISA 404(c).
Source: StanCorp Financial Group , April 2009.
DOL Requirements for Participant-Directed Investments - Summary: This article summarizes the DOLs section 404(c) regulations and describes the participant disclosure rules that must be satisfied to obtain 404(c) protection. In addition, it identifies fiduciary obligations that are not eligible for 404(c) protection, impacts of automatic enrollment on 404(c) protection, and Form 5500 reporting requirements for 404(c) plans.
Source: Prudential , July 2008.
ERISA Section 404(c) Meets "The Real World" - Summary: Who is responsible for a 401k plan participant’s investment losses? Some courts agree with the DOL that the selection of a plan investment is a fiduciary function and, as such, lies outside ERISA Section 404(c)s protection. Other courts take a totality of the circumstances approach and indicate Section 404(c), under the right set of facts, may protect a fiduciary from liability when a 401k plan investment goes bad.
Source: Jones Day , April 2008.
A Step Beyond ERISA Section 404(c) - Summary: The increased attention on daily market activity, trading of individual stocks (or narrow sector mutual funds) and the ability to trade participant accounts on a daily basis have all worked to frustrate what the authors believe should be the fundamental, underlying objective of a participant-directed 401k plan: to provide those conditions that allow plan participants the best opportunity for a successful investment experience so that they can retire comfortably.
Source: Chang, Ruthenberg & Long, April 2008.
Illuminating the "Broad Range" Requirement of 404(c) - Summary: This column helps illuminate the "broad range" requirement of ERISA Section 404(c) with the language of modern portfolio theory and other nations of financial economics that is found in the Uniform Prudent Investor act and the Restatement 3rd of Trusts (Prudent Investor Rule).
Source: Prudent Investor Advisors , June 2006.
Current Considerations and New Challenges for ERISA § 404(c) Compliance - Summary: This article provides a broad overview of the ERISA §404(c) requirements and analyzes considerations and challenges many plan sponsors face as they strive to comply with those requirements. The article outlines the disclosure obligations imposed by ERISA, highlighting recent regulatory guidance applicable to mutual fund prospectuses, and discusses new developments regarding mutual fund fees.
Source: Gardner Carton & Douglas , March 2005.
The Fable of Fiduciary Liability and 404(c) Plan Design - Summary: ERISA provisions on fiduciary liability can be very confusing. This article looks at the blurred lines surrounding plan design and fiduciary liability—or are they blurred?
Source: Gardner Carton & Douglas , March 2005.
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